Investors at the Nairobi Securities Exchange (NSE) will pay Ksh.1,200 annually or Ksh.100 monthly for the upkeep of their trading accounts.
In a text message to investors, the Central Depository and Settlement Corporation (CDSC) said the fee will be effective July 15, 2022.
“Dear investor, effective July 15, 2022, CDSC will introduce a CDS account maintenance fee of Sh100 per month payable annually.”
This is likely to push up the cost of stock investment amid reports of low trading activities.
According to the latest Capital Markets Soundness Report for the period between January and March, market capitalisation at the NSE dropped to Ksh.2.43 trillion from Ksh.2.6 trillion same period last year.
Annual report for 2020 shows CDSC had about 1.5 million accounts out of which 1.1 million were actively trading.
The announced fee will see investors at the bourse deposit Ksh.1.8 billion in annual fee to CDSC.
According to Business Daily, CDSC’s main revenues are earned from transaction levy upon completion of equity and bond transactions in the central depository system where it earned Sh238 million in 2020.
It charges each investor 0.08 percent of each transaction plus 0.01 percent for the CDSC guarantee fund.
Depository levy earned the platform Ksh.16.5 million, registry fees Ksh.4.7 million, bond levy Ksh.27.6 million, and others Ksh.20 million.
The upcoming charge will boost earnings and dividends for its principal shareholders, including Capital Markets Challenge Fund, Nairobi Securities Exchange, AKS Nominees, Capital Markets Investor Compensation Fund, and the Uganda Securities Exchange.
Additional information from Business Daily